Politics

The politics of carbon markets are in a constant flow. The debate takes place at various levels. Historically, the flexible mechanisms were defined and developed at the international level, under the auspices of the UNFCCC. Currently, more and more carbon markets are being developed unilaterally by some countries or in collaboration with other countries, but outside of the UN framework. The EU is to date the single largest source of demand for international carbon credits. More specifically, the EUEmissions Trading Scheme allows installations covered by the scheme to fulfil a part of their obligations through using international carbon offsets. Political decisions at the EU level are therefore highly influential for the development of international carbon mechanisms. Finally, the German government and the German Parliament are responsible for the regulatory framework for German enterprises that want to engage in international carbon markets.